Ladies and gentlemen, welcome to PCCW 2025 interim results announcement. Presenting today are Ms. Susanna Hui, Acting Group Managing Director and Group Chief Financial Officer, and Mr. Marco Wong, Head of Investor Relations. Over to Susanna, please.
Good afternoon. Thank you for joining the PCCW 2025 interim results today. Despite a very challenging macro environment in the first half of 2025, PCCW remained very focused on delivering high-quality services to our customers and achieving profitable growth across all of our businesses. Within our media business, Viu maintained its market leadership, with paid subscribers reaching 13.8 million, and is on track to reach positive cash flow. ViuTV unlocked new opportunities and elevated the global presence for our roster of talented in-house artists. As for HKT, we are very committed to leveraging our leading digital infrastructure and comprehensive deployment of AI to serve our customers better, unleash the advantages of digital transformation for enterprises, as well as transform HKT's own business workflows.
If you look at the financial highlights, PCCW delivered solid financial performance, with revenue rising by 7% to over HK$2.4 billion and EBITDA increasing by 6% to $771 million. Whilst HKT posted robust results with 4% growth in revenue and 3% growth in EBITDA, as well as a 3% growth in AFF and distributions, demonstrating continued resilience, our OTT regional service also recorded an impressive 10% growth in top line and a 51% improvement in terms of the EBITDA. On the domestic TV side, the ViuTV revenue and the related businesses retreated in the first half due to the timing of the concerts and events, with margin remaining stable. We expect that performance will rebound in the second half on the back of numerous popular shows and concerts scheduled in Q3 and Q4. On the back of this performance, the board has declared an interim dividend of HKD 0.0977 per share.
Whilst PCCW continues to benefit from HKT's steady growth and distribution upstream, we, as a board, will continue to adopt a very prudent dividend policy to prioritize financial strengths for sustainable growth, as well as striving to provide stable returns for shareholders. Turning to our OTT business, Viu, the regional business, continues to hold number one position amongst the Asian players and maintains its differentiation against large global platforms. In terms of key operating metrics, we sustained our ranking with strong performance in terms of the MAU, monthly active users, as well as paid subscribers. These achievements demonstrate the appeal of our carefully curated content portfolio, localized strategy, as well as a strong partnership ecosystem.
To deepen penetration and enhance viewer experience, during the first six months, we added new titles of 150, which are diversified across Chinese, Korean, as well as locally Viu original content with a lot of travelability across the entire region. To extend our reach, we also expanded our partnership ecosystem. We deepened partnership with local carriers by offering premium packages, integrating with their applications and media platforms, as well as broadening cooperation to include content co-production, for example, with Telkomsel in Indonesia on a few original scripted drama series. We believe that these initiatives allow us to effectively optimize resource allocation and increase exposure for our content, resulting in paid subscriber growth of 19% year- on- year during the first half. In terms of the advertising business, we also expanded the monetization opportunities despite the relatively soft advertising spend that we saw from the region.
In particular, during the first half, the AVOD tier on connected TV gained traction, which enabled advertisers to extend their reach to the mass affluent segment. As a result of these efforts, we saw total subscription and advertising revenue grow by 27%, leading to EBITDA margin improving significantly to 29%, providing a pathway to achieve positive cash flow in the coming months. The following slide shows the content. We continue to be very focused in terms of striking a balance between the Korean content, as well as the Chinese content, and the local content for prudent return. During the first half, we doubled the number of Chinese titles on our platform in response to their rising popularity, on top of the obviously crowd-pleasing Korean shows. We also released seven Viu Originals with cross-market appeal that received positive audience response.
In the first half, we saw very strong expectations built up from our content lineup, and we do think that in the second half, we'll be able to achieve top viewership on a lot of the content, especially on the Taxi Driver Season 3, which achieved very good results from the previous two seasons. Next slide is the domestic ViuTV business. We have been consistently delivering captivating content across various formats, and in particular, during the first six months, we saw digital membership grow by more than 4% to reach 3.3 million, and viewing time also rose by more than 4%, reflecting our relatively younger audience segment. In terms of advertising revenue, we achieved stable advertising revenue in the first half despite the soft consumer spending in Hong Kong.
Content pipeline for the rest of the year includes proven hits of drama and game shows, as well as our iconic program, Kingmaker 6, which we believe will contribute to stronger sponsorship and advertising revenues in H2. Our talent management business, on a roster of nearly 70 talented artists, achieved mileage in the first half in terms of elevating our artists' international exposure. Many of our talents collaborated with top-tier artists on global stage, including the recent Coldplay world tour concert in Hong Kong, participated by one of our artists, Marv, as well as a variety of international productions. With respect to our concerts and events, despite a limited schedule during the first half as compared to the first half of 2023, we are seeing momentum in H2 with a very strong lineup of popular concert series planned in Q3 and Q4.
In addition, we are diversifying revenue streams to include theater plays for live entertainment presence, and some of our acclaimed content, including music shows, dramas, and movies, continue to push the frontier to different platforms and markets. With that, I would pass to Marco for the financial section. Marco.
Thanks, Susanna. As you can see on the first slide, it's a summary of the HKT Limited financial performance for the first half, which was released yesterday. I won't go into the details of the financials, but summarize a few key points. As you can see, HKT Limited's total revenue, as well as services revenue, both grew 4% to $2.2 billion and $2.09 billion, respectively. The main drivers being accelerated demand from enterprises for our digital transformation solutions, sustained demand for our high-speed fiber services, as well as a growth in mobile services revenue from 5G mobile services, as well as roaming revenue. On the right-hand side of the chart, you'll see that EBITDA also grew, with mobile registering a 5% EBITDA growth, with TSS growing by 3%.
This, together with enhanced operating efficiency, resulted in an overall EBITDA growth of 3% to $818 million, and the overall EBITDA margin was stable at 37%. Adjusted funds flow also increased by 3%, reaching $328 million, and as a result, the interim distribution per SSU was $0.338. Turning to the Viu regional OTT business, this saw significant revenue growth of 27% in subscription and advertising revenue, but this was partially offset by softer syndication and event revenue, particularly in the Middle East market. Nevertheless, overall OTT revenue grew by 10% to $153 million, and with our optimized content offering, as well as our growing scale, this drove an impressive growth of 51% in EBITDA, with the EBITDA margin expanding by 8 percentage points to 29%.
With the strategic scaling of the business, as well as continued disciplined content portfolio curation, we believe the OTT business is on track to reach positive cash flow. On the free TV side, with the more limited number of concerts and events scheduled in the first half, the free TV business revenue retreated to $44 million, compared to $62 million last year, although advertising revenue was stable despite weaker consumer spending and the subdued retail market in Hong Kong. As a result, the EBITDA decreased to $6 million. However, in the second half, with a lineup of hits as well as iconic shows, together with concerts scheduled in the third quarter and fourth quarter, we expect revenue and profitability to return. On the OPEX side, you'll see that there was improvement, with OPEX decreasing by 5% to $376 million, with the ratio improving significantly from 17.4% to 15.5%.
This was contributed by OTT's OPEX savings through the enhancement of publicity and promotion efficiency due to its rising brand recognition, and as we discussed yesterday, HKT also delivered 4% OPEX savings from AI adoption, as well as streamlining business structures, network, as well as the IT platform. On the CAPEX side, this continued to fall, dropping by 3% to $142 million, with the ratio further improving from 6.5% to 5.8%. This was driven by mobile CAPEX being lowered, as well as TSS CAPEX being lowered at HKT, as well as the completion of the initial phase of the new production facilities at the media business. This led to the spending there decreasing year- on- year to $3 million.
In terms of capital structure, as you can see here on the debt maturity profile, you'll see that HKT, as mentioned in yesterday's results, gross debt dropped to $5.57 billion from $5.94 billion 12 months ago, following the deleveraging that we completed in December 2024. In terms of the bond that's maturing in 2026, we already have strong liquidity of $2.3 billion, comprising of cash as well as bank lines that are sufficient for refinancing when it comes due. At the bottom of the slide, you'll see PCCW. There's no imminent debt due in 2025 and just a small amount in 2026. You'll see that we've maintained a balanced mix of bank borrowings as well as bonds, with the ratio of fixed to floating debt being kept at approximately 55/45, resulting in an effective interest rate of 4.1%.
Although with this mix of fixed floating debt, we expect the effective rate of interest to fall further if the current lower HIBOR persists, and we saw the maturity kept at around 3.1 years. In terms of the liquidity, we continue to enjoy strong support from banks, with total facilities of $2.8 billion, comprising of $2.05 billion at HKT and $800 million at PCCW as of the June year-end, and overall the group's cash was $300 million on a consolidated basis. The net debt to EBITDA ratio has improved to 4.17x compared to 4.2x at the same time last year, and with that, that ends the presentation today.
That's the end of the analyst briefing. Thank you very much.